put meaning into marketing &profit through purpose

2009 Edelman goodpurposeTM ReportA 10-country social purpose study of people’s expectations of corporations, brands and themselves

U.S., China, Canada, U.K., Germany, Italy, France, Brazil, Japan and India

PUT MEANING INTO MARKETING & PROFIT THROUGH PURPOSE

INTRODUCTION

We conducted our third annual goodpurpose™ study of 6,000 people in 10 countries to track and understand people’s expectations of companies and brands, as well as their own attitudes and actions, toward addressing societal challenges such as the environment, health, poverty, education and the arts.

We found that people are placing increasing demands on companies, brands—and themselves—to signifi cantly increase their social commitment, with more than half of our respondents globally saying they believe that a company or brand has earned their business because it has been doing its part to support good causes, with countries like China, India and Brazil leading the way.

As companies and brands become catalysts for social change, traditional corporate social responsibility and brand marketing are moving closer together—creating a new model of engagement based on mutual purpose for mutual benefi t.

The data from Edelman’s 2009 goodpurpose™ survey provides companies and brands with insights into tapping into this values shift and engaging their stakeholders—including vendors, employees, NGOs, regulators and customers—to achieve both their business and societal goals.

KEY CONCLUSIONS FROM THE STUDY INCLUDE:

• People want brands to pay equal attention to both social and business concerns.

The majority of people now believe that the interests of both society and business should have equal weight in business decisions, fusing profi t with purpose.

Mitch Markson,Chief Creative Offi cer, Founder/President, Edelman goodpurpose

Alan VanderMolen,President, Asia Pacifi c

• “Mutual Social Responsibility” is premised on partnership and participation.

Today, people expect to be involved in positive social change. Introducing “mutual social responsibility”—where companies, brands and people work together to effect long-term positive social change for mutual benefi t.

• Social purpose is the new social status.

Consumers are shifting away from traditional status symbols like big houses, luxury cars and designer brands toward identifi cation with social purpose brands, as a majority of people are willing to change consumption habits if it can help make the world a better place to live.

• Social purpose is a key driver in energizing people to recommend and promote a brand.

Businesses are creating new markets by engaging and partnering with all their stakeholders around their social purpose.

• The prolonged recession is driving new ways to participate and new attitudes toward marketing.

The majority of respondents say the global recession has limited their ability to give money to community causes, but they are giving more time to support good causes. In fact, 71% of all people globally believe that brands spend too much money on advertising or marketing and they should put more money into some good cause or social purpose.

• Social purpose must be authentic and refl ect the corporation’s and brand’s core proposition.

The purpose must be authentic to the core values of the company and brand, and be relevant to all stakeholders and aligned across both the fi rm’s CSR and cause-related brand marketing activities.

• Return on involvement, like return on investment, must be measurable and credible.

The traditional marketing model aimed at “selling” brands to peopleis moving toward a new model in which brands are catalysts for heroing consumers, enabling them to get involved.

KEYS TO MUTUAL SOCIAL RESPONSIBILITY SUCCESS

• Align business purpose with higher social purpose.

• Empower all stakeholders—from vendors and investors to employees and customers—to be involved.

• Enable people to adopt daily responsible behaviors; make it tangible, accessible and easy.

• Provide a measurable, direct impact.

• “Be, Do and Share”: vision, action and exchange.

ALIGN CSR AND BRAND MARKETING

Today, 66% of people globally say that it is no longer enough for businesses to give money to causes; they want good causes integrated into daily business operations (country breakdown, fi gure 1).

The future of corporate social responsibility (CSR) and cause marketing is the opportunity to put purpose closer to the center of a corporation’s and a brand’s core proposition. By aligning a company’s CSR with its brand marketing activities, corporations will more effectively engage stakeholders—i.e., employees, government, NGOs and consumers—in working together to effect lasting change on societal issues such as the environment, healthcare and education.

Determining an authentic social purpose platform involves listening to the expectations of all stakeholders; aligning with business strategies to refl ect the brand or company DNA; ensuring a credible, measurable return on involvement; and becoming a trusted partner that facilitates the opportunity for people to make a positive impact on the world.

GLOBALLY:

• 56% of people feel the interests of society and the interests of businesses should have equal weight in business decisions.

• 54% prefer a job in a company that gives back to society above a job that offers great personal achievement.

• 65% are more likely to trust a company that addresses social concerns.

• 59% have a better opinion of corporations that integrate good causes into their business, regardless of the reasons why they do so.

Figure 1

Higher expectations are being placed on businesses to integrate good causes into their day-to-day operations

67% 69%

61%63%

66%

57%

67%

59%

67%

82%

% Agree: “It is no longer enough for corporations to simply give money away to good causes; they need to integrate good causes into their day-to-day business.”

U.S. Canada U.K. France Germany Italy China Japan India Brazil

100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Shell’s “FuelSave Challenge” in Europe helped more than 100,000 people learn to save fuel in the fi rst week alone.

Sustainable Energy Ireland’s “The Power of One” initiative engages consumers on how

to become more energy effi cient.

63%

73%

57%

70%74%

61%

67%

58%62%

83%

% Agree: “I would switch brands if a different brand of similar quality supported a good cause.”


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Consumers would switch brands to help support a good cause

People are willing to advocate for and purchase brands that support a good cause. In fact, two out of three people (67%) globally stated they would switch brands if a competitor of similar quality supported a cause (country breakdown, fi gure 2).

We found that during a recession, people’s interest in contributing fi nancially to good causes declines, but their attraction to brands and companies that allow them to make meaningful and direct change does not. We consider this an era of citizen involvement. Brands should move beyond one-way, cause-related marketing to mutually benefi cial purpose marketing by engaging consumers to support causes that are meaningful to both the company and the consumer.

GLOBALLY:

• 58% of people are looking for brands to do more than provide them with a product or service (country breakdown, fi gure 3).

• 64%—reaching 89% in Brazil—expect brands to do something to support a good cause (fi gure 3).

• 65%—peaking in Brazil at 84%—have more trust in a brand that is ethically and socially responsible.

GREAT EXPECTATIONSFigure 2

Consumers place high expectations on brands to deliver more than product value

Demand highest in Brazil and India

60%

53%

76%

62%

55%

62%

57%

66%

60%

66%63%

57%53%

58%58%55%

42%

89%

75%

58%

% Agree: “I expect brands today to do something to support a good cause.”

% Agree: “I’m looking for brands to do more than just provide me with a product.”


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Figure 3

Dove’s Self-Esteem FundTo help the next

generation from self-limiting beauty stereotypes, Dove initiated workshops around the world to improve self-esteem, touching the lives of fi ve million girls.

PepsiCo & TerraCyclePartnering with TerraCycle, which specializes in making eco-friendly materials from residuals, and working with the Brazilian NGO Solidarium, a co-operative of sewing women, PepsiCo created a line of recycled accessories sold at WalMart.

The study found that while people care about a considerable number of causes, protecting the environment (91%) and improving the quality of healthcare (89%) are the top two global concerns (fi gure 4). But in the U.S., poverty and healthcare top the environment. This indicates that across all 10 countries, signifi cant opportunities exist to engage consumers by linking brands and companies with social causes that people think are worthwhile and that align with the DNA of the brand or company.

• In the U.S., people care most passionately about alleviating hunger and homelessness (93%).

• In China and India, an equal opportunity to education (96%, 97% respectively) and protecting the environment (97%, 95% respectively) are what people personally care about the most.

• In Germany, France and the UK, protecting the environment is the highest concern (85%, 90%, 87% respectively).

• In Brazil, 96% of people care about protecting the environment and improving the quality of healthcare.

WHAT CAUSES DO PEOPLE CARE ABOUT? Brita’s “FilterForGood” has motivated thousands of consumers to reduce waste by switching to a

reusable bottle fi lled with fi ltered tap water.

Figure 4

What causes do consumers personally care about?

Protecting the environment

Improving the quality of healthcare

Reducing poverty

Alleviating hunger and homelessness

Equal opportunity to education

Promoting societal health and wellness

Disaster relief

Supporting human and civil rights

Building understanding and respect for other cultures

Supporting labor rights

Fighting the spread of global disease

Helping to raise people’s self-esteem

Supporting animal rights

Supporting the creative arts

91%

89%

87%

86%

86%

85%

85%

83%

81%

81%

80%

78%

76%

68%

For companies and brands, doing good and making money can go hand-in-hand, as 61% of people—83% in China—have bought a brand that supports a good cause even if it wasn’t the cheapest.

GLOBALLY:

• 64% of people say they would recommend a brand that supports a good cause, a 12-point increase from 2008 (country breakdown, fi gure 5).

• 59% would help a brand promote its products if there was a good cause behind it—increasing by six points in the last twelve months (country breakdown, fi gure 6).

• 58%—peaking at 82% in India—choose to buy brands that support good causes because they cannot fi nancially support good causes on their own.

• When choosing between two brands that are the same in quality and price, 43%—reaching 71% in Brazil—are more interested in the social purpose of a corporation or brand than design or innovation (34%) and brand loyalty (24%).

PROFIT MEETS PURPOSE

2008

63%

47%

+16

76%

65%

+11

59% 60%

44%

+1662%

72%

65%

58%

50%

71%

81%

+10

2009

+12

47%

% Agree: “I am more likely to recommend a brand that supports a good cause than one that doesn’t.”

53%

40%

+10

39%

+26 59%

+13

57%


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Brands that support good causes have a “word of mouth” advantage over those that don’t

This advantage has increased signifi cantly in most markets over the past year

Figure 5

Support for good causes can help create brand advocatesParticularly true in North America, Italy and developing markets

of Brazil, India and China

Quaker’s consumers were powered by their potential to do

good in the community through the “Quaker Go Project.” With partner “Share Our Strength,” Quaker and its customers helped feed hungry families across the country.

JJMC (Johnson & Johnson Medical China)—through community workshops and free hospital consultations—equips people with healthcare information that allows them to educate their local communities. 2008

61%

48%

+13

75%

65%

+10

56%

45%

35%

+1061%

69%

51%49%

42%

70%

82%

+12

2009

50%

% Agree: “I would help a brand promote their products or services if there is a good cause behind them.”

49%

41%

47%

54%

+15

66%


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Figure 6

INVOLVE PEOPLE THROUGH THEIR ACTIONS

Despite the recession, people are turning to companies, organizations and brands linked to a social purpose as a way to contribute their own resources, both time and money, to help solve social challenges. As such, they are partnering with companies and brands that are:

• authentic and put purpose at the core of their corporate/brand promise

• credible and relevant to them as individuals

• engaging in their efforts

• measurable so they can see the impact of their actions

GLOBALLY:

• 63% of people—86% in Brazil—are looking to brands that make it easier for them to make a positive difference in the world.

• While the recession has created limitations, with 70% saying that it has restricted their ability to give money to community causes and 33% (51% in the U.S.) giving less fi nancial support, 53% have donated more time (country breakdown, fi gure 7).

Starbucks “I’m In” secured more than one million hours of volunteer time by motivating coffee lovers across America to participate.

BMW China Culture Journey Aligned with China’s need to protect its cultural heritage in the

midst of massive modernization, BMW launched a multi-region tour across the country to draw attention to preserving cultural landmarks.

Figure 7

The U.S. is the only country where the majority of people indicate giving less fi nancial support to good causes due to the economic downturn; consumers in China, India and Brazil are most likely to indicate giving more time

51%

% indicating they have given less financial support of good causes due to current economic downturn

22%23%

17%

31%28%

44%

39%

46%

30%

% Agree: “I have given more time in support of good causes this year because I have not been able to give as much money.”

49%

82%

36%

73%

58%

41%38%

32%36%

69%


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%


Majorities in most countries prefer a hybrid car over a luxury car

We have shifted from the age of immediate gratifi cation to the age of immediate justifi cation.

In fact, 83% of respondents are willing to change consumption habits if it can help make the world a better place to live, indicating a trend away from traditional social status symbols like luxury goods in favor of brands with a social purpose.

People around the world are now wearing, driving, eating and living their social purpose (fi gures 8, 9 and 10).

GLOBALLY:

• Twice as many people would prefer a hybrid car (67%) to a luxury car (33%), with Japan and France preferring hybrids the most (89% and 84%, respectively). For example, as of November 2009, Prius sales in the U.S. have increased by 10.3% compared to this time last year. (Source: Toyota)

• 69% would rather have a brand that supports the livelihood of local producers over a luxury brand (31%); people in North America, Europe, Japan and Brazil show overwhelming support for local producers.

• 70% would prefer to live in an environmentally-friendly home as opposed to 30% who would opt for merely a large house.

SOCIAL PURPOSE IS THE NEW SOCIAL STATUS

69%

31%

45%

55%

89%

11%

51%

49%

81%

19%

51%

49%

84%

16%

63%

38%

75%

25%

80%

20%

Prefer hybrid car


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Prefer luxury car

Figure 8

Tavi,† a 13-year-old fashion blogger from Chicago, opens up her eBay store and instantly starts raising money for Darfur.

TOMS Shoes† gives a pair of new shoes to a child in need for every pair purchased.

76%

24%

46%

54%

87%

13%

62%

38%

67%

33%

49%

51%

83%

17%

69%

31%

83%

17%

79%

21%

Prefer large home Prefer environmentally-friendly home


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Majorities in most countries prefer an environmentally-friendly home

over merely a large home

Strong majorities in most countries prefer a brand that helps support the livelihood of local producers over a designer brand

85%

15%

49%

51%

76%

24%

30%

70%

88%

12%

49%

51%

86%

14%

83%

17%

87%

13%

84%

16%

Prefer designer brand Prefer brand that helps support the livelihood of local producers


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Figure 9 Figure 10

†Not an Edelman client.

We have moved away from top-down communications, where the marketing and communications of brands and companies were one-directional. Companies are now engaging, informing and empowering individuals to leverage their own social networks for social purpose, online and offl ine.

• In addition to family and friends, people typically turn to various forms of traditional media, including television news and newspapers, to learn about causes, particularly in China and India (fi gure 11).

• Of the people who joined a cause on a social networking site and/or followed a cause on a microblogging site, 47%—reaching 88% in China—became more involved in a good cause after learning about it on a site such as Facebook or Twitter.

ENGAGE PEOPLE IN YOUR PURPOSE Social Networking Driving Social Purpose The rising importance of social media as a catalyst for CSR and cause marketing can be seen in applications from Google, Facebook and Twitter. Check out these sites as well:

BetterPlace.orgCitizenEffect.orgSocialVibe.comCauseCast.com

HOW PEOPLE WANT TO ENGAGE WITH AND BE INFORMED ABOUT SOCIAL PURPOSEFigure 11

24%

Television news Family or friends

42%

22%

34%

60%

45%

60%

52%

45%

62%

88%

32%

47%

31%27%

50%

63%

71%

31%

46%

77%

33%

15%

26%

39%

34%

50%

15%

26%

46%

39%

31%

39%

26%

42%

38%39%

34%

53%

41%

54%

26%

39%

65%

57%

47%

53%

36%

49%52%

Local newspaper Television shows Television advertisements


100%

90%

80%

70%

60%

50%

40%

30%

20%

0%

10%

Top 5 Sources Globally: Television news, family or friends, local newspaper, television shows, television advertisements

Like return on investment, return on involvement can be quantifi ed and measured to show demonstrable impact. Return on involvement is evaluated by conversation, interaction, co-creation, involvement, membership, brand loyalty, purchase and re-purchase, and can be fueled by social purpose. People aren’t just buying a product or service, they are buying the opportunity to make an impact, and at a very personal level.

Increasingly, corporations are changing the way they conduct their philanthropic efforts and are now applying market principles to address and measure the impact of their efforts (fi gure 12).

CALCULATING RETURN ON INVOLVEMENT

“It is in the interest of the enterprise to take care of the economic and social environment.

To create value for shareholders but also to create value and wealth for customers,

employees and regions where the companies operate because our company is an

economic and social project.”Franck Riboud, CEO, Danone

Figure 12

Mutual SocialResponsibility

Return on Involvement

Foster Emotional Bond

Engage Public

Ownable Idea

Profit Meets Purpose

Purpose Driven

Build Brand Loyalty/Sustain Relationsh

ip

Build Mutual Trust & Mutual Benef

it

About the Edelman goodpurpose™ StudyThe 2009 goodpurpose™ survey was fi elded among consumers ages 18-64 across 10 countries from July to August 2009. The research fi rm StrategyOne conducted an online survey in all countries except India and China, where the survey was conducted face-to-face. The survey sampled 6,026 adults in the U.S., China, Canada, U.K., Germany, Italy, France, Brazil, Japan and India. Results were weighted to the national census representation in each country with a margin of error being:

6,000 consumers were surveyed online, weighted to the national census representation in each country with margin of error being:

10 countries 6000 +/- 1.3% margin of error

U.S. or China 1000 +/- 3.1% margin of error

Other countries 500 +/- 4.4% margin of error

For more information about social purpose marketing, visit www.goodpurposecommunity.com, follow the conversation on Twitter @LIVEgoodpurpose or join us on Facebook at www.facebook.com/goodpurpose.

About Edelman

Edelman is the world’s leading independent public relations fi rm, with 3,200 employees in 51 offi ces worldwide. Edelman was named PRWeek’s “2009 Agency of the Year,” PRWeek’s “Large Agency of the Year” (for the third time in the last four years), Holmes Report’s “2009 Best Large Agency to Work For” and was listed as a top-10 fi rm by Advertising Age in 2007 and 2008. Edelman owns specialty fi rms Blue (advertising), StrategyOne (research), and BioScience Communications (medical education and publishing). Visit www.edelman.com for more information.

Cert no. BV-COC-054762

put meaning into marketing &profit through purpose

Documents

social purpose brands

social commitment

new social status

mutual purpose

majority of people

designer brands

energizing people

brands core proposition